Legal Ethics Opinion No. 1431
Communication With Adverse Witness/Party: Opposing Counsel's
Contact With Client Who Is Attorney Serving As Trustee In
Bankruptcy
You have indicated that an attorney represented two Corporate
Clients in litigation against three Debtor/Defendants arising out
of the latter's fraudulent conduct. Following the entry of a
judgment against the Debtor/Defendants, they filed Chapter ll
Bankruptcy petitions. You advise that, prior to the those
filings, the Debtor/Defendants undertook to transfer to their
wives two groups of property for no consideration, each group of
which is allegedly of sufficient value to satisfy the judgment.
Two of the three Debtor/Defendants have since converted their
petitions to Chapter 7, while the third remains in Chapter ll and
Trustees have been appointed in all cases.
You have further indicated that, because of the attorney's
extensive familiarity with the issue involving fraudulent
transfers of property, the Chapter ll Trustee, who is himself an
attorney, requested that the attorney enter an appearance as
counsel to the Trustee in connection with litigation against the
Debtor/Defendants and their wives arising out of the fraudulent
conveyances. Attorney secured the consent of Corporate Clients
as well as the Chapter ll Trustee as to any conflict of interest
and was appointed by the Bankruptcy Court as counsel for the
Trustee for the purpose of instituting litigation regarding the
fraudulent conveyances.
The facts you have provided indicate that lawsuits were
instituted on behalf of Trustee/Client while settlement
negotiations were conducted by attorney on behalf of Corporate
Client in the corollary matter. Furthermore, you indicate that,
prior to the first scheduled trial brought on behalf of the
Trustee/Client regarding the fraudulent conveyances,
Trustee/Client advised the attorney that he had settled the
pertinent claims with the adverse attorney representing the
Debtor/Defendants in those matters. Finally, you advise that
attorney never authorized the adverse attorney to discuss
settlement with Trustee/Client and, in fact, was unaware that
settlement discussions were being conducted or that adverse
attorney was representing to Trustee/Client that he was being too
heavily influenced by attorney's firm. Based upon the settlement
reached, Trustee/Client directed attorney to remove the actions
from the trial docket and the attorney-client relationship was
then severed.
You have asked the committee to opine whether, under the facts of
the inquiry, it was proper for adverse attorney to conduct
settlement negotiations with Trustee/Client without authorization
from attorney appointed to represent Trustee/Client. You have
not requested that the committee consider any questions related
to the issue of dual representation and any subsequent conflict
of interest.
The appropriate and controlling disciplinary rule relative to
your inquiry is DR 7-l03(A)(l) which precludes a lawyer, in the
course of his representation of a client, from communicating on
the subject of the representation with a party he knows to be
represented by a lawyer in that matter unless he has the prior
consent of the lawyer representing such other party or is
authorized by law to do so. See also Ethical Consideration 7-l5.
The committee has previously opined that, where the disciplinary
rules bar direct contact between an attorney and an adverse party
who is represented by counsel, neither the fact that the attorney
is representing himself nor the claim that the adverse party's
attorney is wrongfully withholding information from the adverse
party would constitute an exception to the rule. LEOs #521,
1323. Furthermore, the committee has also opined that the plain
language of DR 7-l03(A)(l), which requires the "prior consent of
the lawyer representing such other party" (emphasis added), makes
no provision for any agreement of a party to override such
prerogative of the lawyer. LEO #l326. The committee has
recently opined that it would not be improper for an attorney to
make direct contact with a previously represented party,
following the entry of a final Order in prior litigation, only
where the attorney (l) knows the representation has ended through
discharge by the client or withdrawal by the attorney or (2) is
authorized by law to do so. LEO #l389.
In the circumstances you present, the committee is of the opinion
that the fact that the Trustee/Client is himself an attorney does
not abrogate the requirement that the adverse attorney conform to
the requirements of DR-l03(A)(l). It is the committee's opinion
that, unless and until the Trustee/Client's attorney has been
discharged or permitted to withdraw, all communication by the
adverse attorney, related to the representation, may only be
undertaken with the prior consent of the Trustee/Client's
attorney unless specific statutory provisions permit direct
communication.
Thus, the committee is of the opinion that direct communication
by the adverse attorney with the Trustee/Client, without prior
consent of the attorney representing the Trustee, is improper and
violative of DR 7-l03(A)(l).
Committee Opinion
September 16, 1991